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Rupa & Co slumps 18% on management exits and as high costs hurt margin

Rupa & Co slumps 18% on management exits and as high costs hurt margin

Rupa & Co slumps 18% on management exits and as high costs hurt margin
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By CNBCTV18.com May 24, 2022 1:05:29 PM IST (Updated)

After opening at Rs 438 per share, Rupa & Company Ltd stock price nosedived to the day's low of Rs 414. The knitwear brand stock quoted at Rs 423.65 on BSE at 11 am.

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Rupa & Company Ltd shares fell sharply on Tuesday, plunging 18 percent to an over two-month low as the Street sentiment dampened over the company's fourth-quarter results and high-profile management exits.
After opening at Rs 438 per share, it nosedived to the day's low of Rs 414. The knitwear brand stock quoted at Rs 423.65 on BSE at 11 am.
Rupa & Co's net profit declined 25.2 percent at Rs 49.3 crore in the last quarter of 2021-22 as compared to Rs 65.9 crore in the previous similar period, a company statement said.
Company's revenue during the fourth quarter of last fiscal increased marginally to Rs 455.5 crore as against Rs 454 crore in the similar previous corresponding period.
Earnings before interest, taxes, and amortisation (EBITA) margin during the last quarter of FY22 also declined to 16.3 percent as compared to 20 percent in the previous similar period.
News agency PTI quoted Dinesh Lodha, CEO of the company, as saying that the fourth quarter of last fiscal was challenging as the industry faced headwinds due to the pandemic coupled with the rise in raw material prices. These factors led to pressure on the margins and steps are being taken to calibrate the pricing of products.
The company's ability to undertake calibrated price hikes and improve sale of premium products to recover margin will be closely tracked, news agency Informist Media quoted an ICICI Direct report as saying.
In fact, Cotton prices have gained nearly 40 percent in 2022 and are at an 11-year high on the back of a demand-supply mismatch, said a report on CNBC-TV18. This is hurting cotton yarn spinners and cotton-based textile and garments manufacturers, forcing many to cut down on operations across the country.
Besides, the two high-profile management exits further dented sentiment in the stock. The company informed exchanges that it has accepted the resignation of Dinesh Kumar Lodha as the Chief Executive Officer and Ramesh Agarwal as the Chief Financial Officer of the company, with effect from May 31.
The company informed that Agarwal, will, however, continue to hold the position of Whole Time Director at the company. He will be replaced by Sumit Khowala, who has been appointed as the new Chief Financial Officer of the company (Key Managerial Personnel), wef June 01, 2022.
—With inputs from agencies
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